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Non-Profit Policies & Procedures ACCESS for America Inc.

example, company locations within industrial parks or similar developments
should be easy to find very similar properties for comparison.

• Review Property Descriptions and Accuracy of Records: Review records
for possible clerical errors. Ensure that property descriptions are correct and
the building size (total square feet) is not overstated. Make sure that all dates
are correct and that all calculations are properly computed. A wrong
construction date or simple mathematical error can increase tax valuations.

• Deflate Property Valuations: Tax assessors generally value property on the
basis of historical cost and the recent sales prices of other properties in the
area. Often, when figuring local property taxes, numbers reported on the
federal tax return will be used. Depreciable assets are valued at cost on the
federal return when figuring depreciation deductions. However, the
appropriate assessment for market value for property tax purposes may very
different.

Further, instead of performing actual physical inspections or assessments of
properties every year, local assessors use "equalization ratios" to adjust the
annual assessment. The equalization ratio is a type of an inflation adjustment
meant to reflect the current general trend in property values. However, the
current trend in property values may not apply to the company's property.
1.4 If the Company can provide solid, well-documented reasons for using different
measures to value property, it may receive a reduction in its property taxes.
Possible valuation methods can include:

• Income Production: Measure the current value of the cash flow stream
generated by the property which may be substantially lowered during a
recession.

• Replacement or Reproduction Cost: How much it would cost to replace or
reproduce the property should be determined. For example, if the construction
industry is in a downturn, the cost to replace the property may be less than
what the Company paid for the property.
Also the Company should evaluate if it incurred any construction cost
overruns due to bad weather, labor disturbances, material shortages, etc., that
may have increased the cost of a new building without adding to its value.
Decorative features may also add much less value than their actual cost.
• Market Prices: The actual recent sales of similar properties may show that
the company's property is over-assessed.

• Unique Features or Business Obsolescence: Changes to the characteristics
of the property or features specific to the company's business may reduce its
value. Examples can include:

a. Change in zoning restrictions that limit the use of the property.

FCR107 – Property Tax Assessments rev 0.0 Page 2 of 4

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